July 1990: President George Bush breaks his most famous campaign pledge--"read my lips, no new taxes"--in exchange for Congressional promises of spending cuts and deficit reduction. Both Bush and the Democratically-controlled Congress agree that the plan would cut the deficit by $500 billion in five years. "That's half a trillion dollars," said President Bush. Yet the deficit grew.
July 1993: President Clinton and Congress pass a similar plan to reduce the deficit by $500 billion. As in 1990, Congress and the President have not made any real changes in government waste and runaway spending, opting instead to raise taxes so as to have more money to burn. The deficit will continue to grow.
The 1990 plan increased the top income bracket from 28 percent to 31 percent, raised the gas tax five cents a gallon and imposed a 10 percent tax on luxury items. The Clinton plan raised the top bracket to 36 percent, added a surtax on income over $250,000, and increased the gas tax 4.3 cents per gallon.
The 1990 plan failed because revenue projections were overly optimistic, Congress never enacted the agreed-upon spending cuts and Congress spent all of the new revenue. Many of the tax increases contributed to the recession. For example, the luxury tax, by Congressional estimates, put 25,000 people out of work in the boating industry alone. As a result of the failed plan, the federal budget deficit has doubled since 1990.
For all of his talk of change, Clinton's 1993 budget includes millions in new spending for pork-barrel projects which he had to approve in order to gain Democratic votes for the unpopular plan: $3.1 million for a railroad museum in Scranton, PA; $2.5 million for a parking garage in Burlington, IA; $11 million for potato research; $2.7 million for a catfish farm in Stuttgart, AK; $1.5 million for oyster disease research . . .
In addition, the new budget fails to reign in one of the major sources of deficit increase--entitlements. Entitlements account for over half of the federal budget, yet the new budget makes no effort to slow their growth. Clinton's package even expands eligibility for food stamps, home energy subsidies and Medicaid, ensuring increased entitlement spending.
Worse still, whatever money is to be raised through new taxes is already being spent. For example, the $1 billion dollars in additional revenue expected from the elimination of the tax deduction for lobbying expenses has already been budgeted for the new campaign finance bill. The $25 billion in new spending and the increases in entitlement disbursements have to come from somewhere. Further, Clinton has engaged in numerous emergency spending programs. When the President declares that something is an emergency, Congress may pass legislation to provide funds without budgeting for them--in effect, spending money they don't have while promising to pay later (deficit spending!). Real emergencies like the $5.8 billion flood-aid bill have been declared, along with some more dubious examples. Clinton's economic "stimulus" package and his national service bill were paid for through emergency spending, as will be the proposed $3.2 billion crime bill. This method of deficit spending is how the Gramm-Rudman laws are routinely circumvented.
The Joint Economic Committee, a Congressional group, found that since 1947 each new dollar of tax revenue has resulted in $1.59 in additional spending. Clinton's executive order declaring that new revenue will go toward deficit reduction has no legal force whatsoever. Congress has passed numerous laws mandating balanced budgets over the years, most recently Gramm-Rudman, to no effect. Hence, there are no legal guarantees of deficit reduction.
While tax hikes on the wealthy, on estates, and on corporations with annual earnings of at least $10 million are retroactive to January of 1993, 80 percent of the spending cuts don't take effect until 1997 or after (these figures come from the Congressional Budget Office). None of the cuts are set in stone, and can easily be reversed, especially since the 1997 budget has not even been written and Bill Clinton may be unemployed by then.
Clinton's budget makes no effort to curb the excessive waste which helped to create the deficit. Sam Donaldson and Prime Time Live have uncovered over $16 billion in government waste to date. P. Norman Roy recently exposed more waste with data taken directly from the General Accounting Office. Inefficiency at the Defense Department has resulted in $40 billion in unnecessary inventory. The Bureau of Indian Affairs has made annual bookkeeping errors of up to $95 million. The Navy spent $12.3 billion on bills which had already been paid, in effect paying twice. Clearly, the last thing this government needs is more money to spend. Hopefully, Vice President Al Gore's National Performance Review will rectify some of these problems.
Clinton promises new spending cuts in the fall, even though he rejected earlier Republican proposals and said he could not find any more cuts (he did not even eliminate the honeybee subsidy as promised in his campaign). If Clinton and the Democrats have more cuts, why aren't they in the 1993 budget? Democrats in Congress pledged consideration of a balanced-budget amendment, but Senate Majority Leader George Mitchell filibustered just such a plan during the Bush administration. Recent actions by Clinton and Congress indicate that the nation's economic woes will not soon disappear. Sadly, Bill Clinton has not broken the Washington cycle of tax and spend.
Barry Rothberg is a Trinity junior.
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.